Target (TGT) is likely to report a weak Q1 and guidance amid undemanding valuation, Morgan Stanley said in a Monday note.
"While 1Q25e comps have likely slowed, and '25e guidance is due for revision, undemanding valuation should limit near-term downside," the report said.
It said a widening in valuation discount of the stock pointed to execution challenges and fading visibility longer-term.
"Longer-term, TGT is pursuing the right omnichannel and retail media priorities, but investment needs are moving higher," the report added.
The note said a more benign tariff outlook could offer some relief in H2 against expectations, but sales trends appear to have softened sequentially since early March, clouding visibility.
Morgan Stanley reiterated its overweight rating on the stock with a price target of $160 per share.
Price: 99.98, Change: -1.11, Percent Change: -1.09
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